A bunker fuel and oil report, detailing the day per day trading patterns and prices in the market.The report is prepared from OW Risk Management and covers all major bunker fuel oil markets around the world, including all major ports, ranging from Singapore to Rotterdam.

Market in Brief

Crude prices traded sideways in a narrow range yesterday cautious ahead of a US Federal Reserve meeting. Market has also been keeping an eye on potential geopolitical tensions in Syria although there are no significant drivers leading to supply disruption. The July WTI contract closed at $97.77/bbl, slipping -$0.08 while the August Brent fell -$0.47 to $105.47/bbl. Currently, crude prices seem to be disconnected from equities which saw some rebound yesterday. Eurozone finance ministers are meeting to discuss Europe banking union plans this coming Thursday ahead of the EU leaders’ summit next week. The US May consumer price index (CPI) and May housing starts will be released later today however; the main focus remains on the announcement by US Federal Reserve Chairman, Mr. Ben Bernanke. This morning, crude is trading -0.2% down.

Fueloil Specifics

The NWE bunker fuel oil markets started the week with mixed sentiment. Main ports in the area reported relatively quiet day as most of the buyers stayed off the market amid too high spot prices. Premiums for prompt hsfo product were heard to reach $15/mt over 3.5% Rtdam FOB barges. Antwerp saw mixed demand with some suppliers able to quote only from June 21-22. The Singapore fuel oil markets were up ranging +$0.5 to +$5.0 during the Asian Platts window yesterday. Market supply looks ample while the recent huge trading of physical cargoes will potentially impede bunker barges activities. This may cause short term avails issues. The delivered bunker premiums were seen app. $5.5 above cargoes prices yesterday. This morning both markets are trading slightly lower.

Settlement & Indications (mid values)

Product Yesterday's Values Forward Indications Product Change Last Dir. Jul Aug Sep Q413 Q114 2014 NYMEX WTI Swap (1st month) (0,08) 97,77 ↓ 97,89 97,86 97,47 96,41 94,96 92,94 ICE Brent Swap (1st month) (0,47) 105,47 ↓ 105,15 104,80 104,43 103,76 102,76 101,06 ICE Gasoil Swap (1st month) (3,25) 894,00 ↓ 888,75 889,83 892,25 892,64 886,81 875,20 3.5% Barges FOB Rtdm (2,75) 590,00 ↓ 588,00 585,75 583,75 581,00 580,00 573,25 3.5% Cargoes FOB Med (1,25) 596,25 ↓ 584,25 581,75 579,75 575,25 573,25 570,50 1.0% Cargoes FOB NWE 2,00 625,00 ↓ 622,50 620,25 617,75 613,25 611,00 602,50 3% no. 6 USGC WB 0,00 92,35 ↓ 92,05 91,95 91,70 91,70 90,70 90,20 380 CST Cargoes FOB S'pore 5,00 612,75 ↓ 611,50 607,50 605,50 604,25 601,50 597,75 0.1 % GO Barges FOB Rtdm (1,25) 898,00 ↓ 889,25 890,25 892,25 892,25 888,25 876,25 Physical Rotterdam 380 CST 0,00 598,75 ↓ 593,25 591,50 589,00 585,75 584,25 578,00 Physical Singapore 380 CST 5,00 618,25 ↓ 617,25 614,00 612,25 611,50 608,00 604,00

Focus of the day: ARA

After last weeks MOC rally with especially Vitol pumping levels upwards we now see a more relaxed trading in the window. This slows down the speculation of an opening arbitrage as we still don’t see any real trend. Question is if the local market can endure such a trend right now as we still see a lot of shorts amongst the suppliers which is creating a natural need to cover them in the window. An up going trend in the window would definitely separate the men from the boys so we are in for an interesting summer should this scenario become a regular thing. On the physical side we still expect higher premiums due to this unexpected tendency with a volatile MOC. High visc product remains tight and creates loading problems from various terminals. Thus, buyers could easily buy a few dollars higher for product coming out of the smaller terminals and thereby ensure timely supplies. Delivered gasoil continues to climb compared to the index which is causing frustration to local buyers but helping an increasingly healthier gasoil market.

Economy fundamentals this week

Fundamental Indicators Statistic Importance Date Time Period Consensus Last Actual Empire Manufacturing Medium 17-Jun 8:30 AM Jun 1.0 -1.4 7,8 NAHB Housing Market Index High 17-Jun 10:00 AM Jun 45 44 52 Core CPI High 18-Jun 8:30 AM May 0.1% 0.1% - Housing Starts Medium 18-Jun 8:30 AM May 925K 853K - Building Permits Medium 18-Jun 8:30 AM May 975K 1017K - FOMC Rate Decision High 19-Jun 2:00 PM Jun 0.25% 0.25% - Initial Claims Medium 20-Jun 8:30 AM 15-jun 345K 334K - Existing Home Sales Medium 20-Jun 10:00 AM May 4.95M 4.97M - Philadelphia Fed Medium 20-Jun 10:00 AM Jun 2.0 -5.2 - Leading Indicators Medium 20-Jun 10:30 AM 15-jun 0.2% 0.6% -

Source: OW Risk Management